Federal childcare fund to run dry in 2024. What that means for Utah parents

Nov 1, 2023, 10:10 PM | Updated: Nov 2, 2023, 3:21 pm

SALT LAKE CITY — New research on childcare in Utah illustrates the struggle many families face when finding care for their kids, and warns of a bigger hill to climb ahead.

The report from the Utah Women and Leadership project out of Utah State University shows that the average Utah family with two kids under the age of four is paying nearly 18 thousand dollars per year on childcare. For the average family, that’s about a quarter of their income, the research said.

The report also warns of what researchers are calling a pending childcare “funding cliff.”

“For the last three years at least, we have had some federal funding that’s linked to COVID. And it’s estimated that by June of 2024, that that will be depleted,” Dr. Susan Madsen, who spearheaded the research said.

The report notes that $573 million of COVID-era support has helped keep Utah’s childcare sector afloat, some of which has already dried up.

The fund required childcare providers to raise salaries for their workers. When it dries up, Madsen said providers can’t afford to continue to support their workers at those wages.

She said this means additional childcare costs could be passed on to Utah families.

“Childcare providers will have less funding to support their growth, to support some of the infrastructure that they need to continue to serve Utah families in these ways, and then families in general will have less money to put towards childcare,” Dr. Madsen said.

She also said Utah could see a dramatic childcare workforce turnover because of the lower wages.

The report also highlighted some facts that many Utah families are experiencing:

  • Utah has the highest percentage of children of any state population—at about 30%—and an estimated 64.1% of Utah families have all available parents working.
  • Some 67.7% of Utah women are in the workforce. Many more would choose to work if childcare were more accessible.
  • The average annual cost of care for two children (an infant and a 4-year-old) is $17,591 which is 24.7% of a Utah family’s income.
  • An estimated $1.4 billion is lost annually from Utah’s economy due to childcare inadequacies.

Dr. Madsen believes the solutions are multi-faceted. For businesses, she hopes they can get creative to offer more solutions for families.

She also hopes state legislature will step up and realize that funding childcare also provides an economic benefit to the state because it allows more people to be in the workforce.

The state passed more than 500 pieces of legislation in the most recent general session, and three of those were childcare related bills.

One bill gives some tax breaks by providing a non-refundable tax credit of $1,000 for each child per year to help with costs. The bill excludes families that receive a child care subsidy and is limited to a narrow group of families making between $45,000 and $56,000 annually.

Utah did not pass a bill that would have created a sales and use tax exemption for construction materials used to construct or expand a child care program.

For one mom from American Fork, she could have benefited from that.

Caressa King has built her career in the childcare sector in both Utah and Texas, most recently working as a childcare director for a company with on-site care. She recently left that job and hopes to now start her own daycare center so she can make money and care for her eight kids simultaneously.

“So right now, I’m home. I’m home. So I haven’t worked for the last three weeks in a field that I love, I miss the families that I’ve worked with, I’ve missed those kids that were mine to ones that I’ve seen grow. But I’m mom first,” she said.

Too many parents, and specifically women in Utah are facing the same struggle as King, juggling both work and caring for their children.

King said going down to one income, has left their family struggling.

“Right now, we’re not making ends meet. We have a house in Houston that is going to be on the market in a few days. So because we need the equity, we’ve lived off of loans from our family. It’s pretty humbling when you have to ask your family for help when my husband has a PhD, and I’ve been a licensed center director for two years,” she said.

Like Madsen, she too hopes the state will step in to fill the gap when the COVID relief fund dries up.

“Let’s be real, the purse strings are with the state. And I really would love them to pass something to help support families,” King said.

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Federal childcare fund to run dry in 2024. What that means for Utah parents